Attorneys for Granite State Gas Transmission and the Town of Wells squared off against each other last week at FERC over the merits of siting a controversial liquefied natural gas (LNG) facility in the Maine community.

In a “rarely” held oral argument involving the certification of natural gas facilities, the attorney for the Wells residents urged the Commission to reject Granite State’s application outright, saying that the town would be forced to shoulder the costs for the LNG plant but would not receive any of the benefits “since [it does] not have access to natural gas.” That’s “just a little irony here,” remarked Barbara Simons, who represents the Wells citizen group of No Tanks Inc.

The Wells group is convinced that two proposed pipelines, Portland Natural Gas Transmission System (PNGTS) and Maritimes & Northeast, would provide as reliable a supply option as the LNG project, and asked FERC to consider them as viable alternatives. Both Granite State and affiliate Northern Utilities, which would be served by the LNG plant, have equity interests in the PNGTS project.

For the Wells residents, the Commission is their last chance along the regulatory chain to block the construction of the LNG facility. The project already has received the blessings of the Maine and New Hampshire Public Utilities Commissions, whose representatives were at FERC to show their support.

Jim Simpson, senior vice president of Northern Utilities, insisted the LNG plant was a far superior supply option than the two pipelines because it would enable the New England LDC to adjust its gas deliveries “almost instantaneously and as often as necessary during the day to keep supply in balance with demand.” This flexibility is critical in New England because of “wide and unpredictable swings in temperature,” which lead to “wide and unpredictable swings in gas demand,” he said. “LNG facilities are an important part of the gas infrastructure in New England because the source of supply, the facility, is located near our load centers, not in far off production or storage areas.”

Northern Utilities has contracted for half of the capacity of the 2 Bcf LNG plant, which would provide vaporization and peak-shaving storage services. Gaz Metropolitain, an LDC in Montreal, would lease the remaining LNG capacity. “That’s a backstop measure. That is not an exclusive arrangement we have with Gaz Metropolitain,” said Simpson, adding that it has the option to lease to other parties at higher prices.

LNG/local storage facilities are becoming noticeably more significant in other parts of the nation. “As pipelines keep tightening up the restrictions on OFOs, on the balancing, local area storage to deal with those restrictions is going to be more important,” Simpson told the Commission.

Granite State attorney Tom Brosnan said the proposed LNG facility would be a “marvelous addition to the total infrastructure…coming into Maine.” He noted Maine has been a “stepchild” as far as natural gas service. Until 1966, “it was without natural gas. Granite State [was] the first pipeline to bring natural gas into Maine.”

Presently, “there is none [market-area storage] in this area of [the Northeast] of any magnitude. This would be the farthest north market-area storage facility in the Northeast,” he said. Under Department of Transportation regulations involving the siting of facilities, “it would be almost impossible to locate a new facility of this size in any place other than a rural area,” such as Wells. “You can’t put it in [an] industrial area. You can’t put it [in] any congested area because of the restrictions on exclusion zones,” Brosnan said.

He estimated 65 alternative sites were reviewed for the siting of the LNG plant. The conclusion was that Wells was the “preferable site.” That may be so, but for the Wells residents and their lawyer, “there should not be a tank at all” under any circumstance in the Maine town.

Susan Parker

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